Commentary and opinion on national and regional politics by Seema Malhotra

Saturday, 3 April 2010

The Economy for the many, not the few

It's been a fascinating roller-coaster week on the economy debate, beginning with the #askthechancellors (for all you Twitter fans out there) Channel 4 debate, which had over 12,000 tweets during the hour. What is reassuring for us all is the extent of consensus with politicians of all parties about the need to cut the deficit, and incentivise growth. Ostensibly the debate between the parties seems to be on matters of when, and how much we cut spending and where we safeguard - and at least at this level, political consensus on the broad way forward is an important backdrop for market stability.  However it is clear that the technical skills of our leading politicians and their hard graft rather than panic has steered us through the downturn. Tackling the downturn is when I believe Gordon Brown came into his own as Prime Minister. We haven't become a Greece or Iceland, we haven't seen the rises in unemployment that might have been expected based on previous recessions, we have made progress in arresting the number of repossessions. For many voters it may seem like the difference between the parties is just a level of detail and that there isn't much difference . But whilst the debate may seem like detail, of course that's where the devil is. Who's going to pay, and who's going to gain from the partys' different policies? What political philosophy underlies those choices, and will we risk a double dip recession if we stifle growth too early? There are no easy routes, and even the NI rise is not one I'd want to see if there was an affordable way of not doing it. However when employer NI has gone up previously, there hasn't necessarily been a reduction in jobs. We need to see these policies in the round - including the support made available for SMEs for innovation and skills, support for apprenticeships and flexible payment terms for businesses. And the biggest question. With the results of Labour's strategy coming through, do we really want to risk political instability or should we let Labour finish the job of recovery?
For a great blog on Osborne's economic policy - read Sunder Katwala's piece at